▲ This Yonhap file photo shows people shopping at a cosmetics retail shop in Seoul. (Yonhap)

 

SEOUL, Aug. 12 (Yonhap) -- South Korean cosmetics companies are expanding their overseas business from North America into Europe after shifting their focus away from China and duty-free shops.

 

Major beauty companies, including Amorepacific Corp., LG Household & Health Care Ltd. and APR Corp., all posted sharp sales growth in North America or the Americas in the second quarter, while leveraging their brand recognition and distribution experience in the U.S. market to expand sales networks across major European countries.

 

◇ North American sales grow as brands move beyond online platforms

 

According to the companies' earnings reports released Wednesday, APR's second-quarter sales in North America reached 376.3 billion won (US$273 million), up 264.6 percent from a year earlier.

 

Amorepacific's sales in the Americas rose 56.5 percent to 210.4 billion won, while LG Household & Health Care's North American sales increased 47.3 percent to 205.8 billion won.

 

Although APR posted particularly strong growth in North America, the figures are not directly comparable because the companies use different geographical and accounting classifications.

 

APR and LG Household & Health Care report North American sales, while Amorepacific reports sales for the broader Americas region. Amorepacific's figure is also based on its operating company, whereas LG Household & Health Care and APR use consolidated figures that include some businesses outside cosmetics.

 

Amorepacific's growth in the Americas was led by Aestura, COSRX and Innisfree.

 

Aestura posted triple-digit sales growth, helped by strong sales of its Atobarrier365 Cream on Amazon and at Sephora. COSRX saw increased sales of its RX line on Amazon and TikTok Shop, while Innisfree's online and offline sales grew on the strength of its Green Tea line and sunscreen products.

 

For LG Household & Health Care, North American sales surpassed those in China for the first time since the company was separated into an independent entity.

 

The company is expanding its offline distribution network in North America, led by premium scalp-care brand Dr.Groot. The brand entered Costco stores in North America in October last year and will begin entering Sephora stores across the United States this month.

 

LG Household & Health Care plans to increase investment in markets with high growth potential and key distribution channels. It also plans to reorganize its global brand portfolio around high-performance products based on scientific research.

 

APR has expanded its North American business by increasing online sales and entering major local retailers, including Target and Walmart. It is also scheduled to enter Costco in the second half of the year.

 

APR's North American sales more than tripled to 376.3 billion won in the second quarter from 103.2 billion won a year earlier. Expanding demand secured online into major offline retail networks contributed to the company's overall growth.

 

◇ Europe emerges as new growth engine for K-beauty

 

Following North America, Europe is emerging as another major growth market for K-beauty companies. However, direct comparisons of the three companies' European sales are difficult because each uses different regional classifications in its disclosures.

 

APR's second-quarter sales in Europe rose 380.3 percent year on year to 145.1 billion won.

 

Amorepacific's sales in Europe, the Middle East and Africa (EMEA) increased 63.3 percent to 72 billion won. LG Household & Health Care did not disclose its European sales separately.

 

APR's figure covers Europe alone, while Amorepacific's includes the Middle East and Africa, meaning the two companies' performances are not directly comparable. Still, both companies recorded strong growth in Western markets, including Europe.

 

APR has expanded its online sales networks, including Amazon and TikTok Shop, focusing on five major European markets -- Britain, France, Germany, Italy and Spain.

 

The proportion of APR's total sales generated in North America and Europe rose to 68 percent in the second quarter from 40 percent a year earlier. As its European business grew, APR began reporting European performance as a separate region starting this quarter.

 

APR plans to extend its growth base established in North America to Europe and expand into other regions, including the Middle East and Latin America.

 

Amorepacific is expanding its EMEA business, led by COSRX. COSRX's sunscreen products ranked No. 1 in the beauty category on Amazon Germany and also performed well on Amazon Britain.

 

Aestura has strengthened its partnership with Sephora and entered KICKS, a Nordic beauty retailer. Laneige launched new products, including Water Bank sunscreen and Juicy Pop Box lip tints, while Innisfree stepped up its local digital marketing.

 

Amorepacific plans to expand COSRX into additional countries and strengthen local marketing while diversifying its European brand and product lineup with Aestura, Laneige and Innisfree.

 

LG Household & Health Care has not presented specific plans for entering the European market, but said it plans to diversify its overseas growth engines, centered on North America, and increase investment in markets and distribution channels with strong growth potential.

 

"One of the main growth paths for K-beauty in North America has been to build brand recognition on online platforms such as Amazon and TikTok Shop and then move into major offline retail networks such as Sephora, Target, Walmart and Costco," a beauty industry official said. "A similar growth path is emerging in Europe, centered on online channels and local distributors."

 

jwc@yna.co.kr

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